Chapter 484 – China’s own pager Part 3 of 3
Many viewers were confused when they saw the commercials. Aiwa Pagers? Aiwa was the company that makes Walkman? Oh, they also sell VCD players.
But both Walkman and VCD players were somehow related. These were considered audio electronics products. But Pagers? The pager was a telecommunication product. This was a completely different sector!
But it was as what Feng Yu had forecasted. Aiwa brand still has some influence in China. Many people in China were curious about Aiwa Pagers. How good were these pagers?
At first, most of the people had a wait and see attitude. Feng Yu had also planned for this. If it was him, a company that makes Walkman suddenly produce pagers, he will also hesitate.
But Feng Yu believed that the selling price of Aiwa Pagers will be able to attract some customers. After all, his pagers were much cheaper than Motorola. The other two brands, Panasonic and NEC, were not selling well in China because they were Japanese brands.
Although the boycott of Japanese products had ended in China, Japanese brands were significantly affected and made hefty losses in China.
The Japanese Government had raised this issue to the Chinese government, but the reply from the Chinese government was that they had advised the consumers to spend wisely. They cannot force the Chinese to use Japanese products. If Japanese products were of good quality and cheap, why would the consumers not buy them?
Japan’s government suspects that this was a plot by the Chinese government to protect their own industries. This was like South Korea. This was against the trade treaty signed between both nations.
But Japan has no evidence to prove this and can only accept it. They were not willing to forgo the Chinese market. This was a vast market, and once this market matured, it will bring lots of profits to the Japanese companies. This was very important to Japan as their recession was not over yet. They desperately need the Chinese market.
If they were to terminate the trade agreement, then the US and Europe will sign all forms of treaties with China and kick Japan out of the picture. Their losses will be much higher!
What can they do now? Nothing. They can no longer export inferior goods to China. They can only export second-tier Japanese products to China. Those inferior goods can only be sold to the other Southeast Asia countries.
But those countries’ market was not established, and the cost of the products exported to China had increased. This resulted in the decline of profits of the Japanese companies. Coupled with the declining sales in China, many of these companies were struggling to stay afloat!
Panasonic was still doing well. They were still producing TV and Video Cassette players, and there were still lots of profits with these products. NEC only have pagers in the Chinese market. In the pager market, Motorola owns about 80% of the market share, and NEC and Panasonic own the remaining 20%. But they still have some profits.
Panasonic and NEC do not dare to withdraw from China like Sony. It will be tough to re-enter the Chinese market once they leave. At least now, they will continue to promote their brand, and they still have a chance when they have new products.
But just when they were thinking of how to increase their sales and profits in China, Aiwa pager, which claimed to be developed in China appeared, and they suffered another blow!
Aiwa pager’s retail price was cheaper than their products by a few hundred RMB. Also, they do not understand how this Aiwa pager was able to sell all over China in a short time.
This was apparently a private company and had the support of the Chinese government. How can Panasonic and NEC compete with them in China?
Now, in all the post offices, shopping malls and shops that specialized in telecommunication products were selling Aiwa Pagers!
At a certain mall. A middle-aged man was standing in front of the pager sales counter. He could not decide which to buy.
“Sir, are you getting a pager? Do you prefer the Chinese characters pagers or only the numeric pagers? If you are looking for Chinese characters pager, I would recommend you our locally manufactured Aiwa Pagers. The commercials are showing on CCTV, and the price is also lower. The money you saved is enough to pay your one-year pager bills!”
“Is this Aiwa pager good?”
“Of course. My brother had bought this too. If this pager is not good, will I ask my brother to buy it?” The sales staff continued.
“Alright, give me one of this and help me activate it.”
Within a week, many people remembered Aiwa pagers. It was not known if the advertisements were effective or people recognized it due to its low prices.
At the same time, Motorola was still able to maintain their sales because of its brand. But Panasonic and NEC Chinese characters pager sales start to decline!
As more people became aware of Aiwa Pagers, there were praises of Aiwa Pagers’ designs.
The pager companies could tell that Aiwa was using their aggressive marketing and affordable prices to compete with them.
They also want to lower their selling prices, but they could not do that. First, they were the same as Motorola. They need to purchase the patent rights of the Chinese characters, and their pagers were produced in Japan. They need to pay taxes to the Chinese Government to bring in their pagers. Motorola was different. Motorola had a factory in China, and their cost and taxes were much lower than the Japanese companies.
The Japanese pager companies could not afford to engage in price wars with Aiwa Pagers. Aiwa pagers made used of low labor cost, and they enjoyed tax subsidies. When their production increases, their cost will be lowered further. If they were to engage in price wars with Aiwa, NEC and Panasonic would suffer heavy losses.
If the heavy losses could exchange for a more significant market share, it was fine. But the problem was that even if they lower their prices, they could not get a more substantial market share. Motorola was still around!
Motorola had also noticed Aiwa Pagers, but they were not worried. Aiwa Pagers might be marketing their pagers aggressively, but they could not jeopardize Motorola’s position in China.
It does not matter if you are cheaper than us. Our brand, Motorola, is worth increasing more than 1,000 RMB per pager! If it wasn’t they were afraid of getting sued for monopolizing the market, Motorola can also use the price war strategy to kill off all their competitors and capture the whole Chinese market!
Feng Yu hanged up the phone. Li Shiqiang had just reported the sales figures to him. Feng Yu was not satisfied with this result. The telecommunication market was already developed, and the demand was increasing every day. How come some pagers were sold for the past 2 weeks? The commercials were not sufficient?
Seems like Feng Yu needs to use some of his connections to get some government policies to support. For instance, getting all the post offices to promote Aiwa pagers. This way, the sales will increase.
In a few more months, the new production line will be installed, and the new factory will be in operation. The production of Aiwa Pagers will increase and if the sales do not improve, how can he occupy the market share? His target was to be the leader of China’s pager market!